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Parliamentary Questions


Question Without Notice No. 869 asked in the Legislative Assembly on 10 November 2020 by Mrs L.M. Harvey

Parliament: 40 Session: 1

KWINANA OIL REFINERY — CLOSURE

869. Mrs L.M. HARVEY to the Premier:

I have a supplementary question. BP Kwinana has been close to closure twice over the years of its existence, and it has been twice saved by Premiers from both sides of politics. Is there more that the Premier could be doing to keep this important facility open for fuel security and employment purposes in Western Australia?

Mr M. McGOWAN replied:

The advice I have is that the refinery loses somewhere between $100 million and $200 million a year. There is a requirement for a $270 million upgrade to equipment at the refinery. That would mean that, on an annual basis, the state government would need to subsidise the refinery with somewhere between $100 million and $200 million a year, and pump at least $200 million into an upgrade at the refinery. That is not something I would think many state governments would be prepared to do because of the extraordinary cost and BP is a multinational that can meet these costs itself should it choose to do so.

We are not happy. I do not think BP, in some ways, has conducted itself particularly well in its dealings with the state over recent years. This situation has been exacerbated, as I outlined, by COVID. Basically, most of the airlines have stopped flying over the last year. A lot of the profit generated by the BP refinery has been in aviation fuels, which it pumps to the airport. Obviously, it has had a massive decline in that trade over the course of the last year. That has had a significant impact on its profitability and made its losses significantly worse than they were before. I think that has brought forward what has occurred. It is very sad. Last weekend, I was in a cafe in my electorate and I met a refinery worker who was losing his position. I talked to him about the training opportunities that we are making available. He was happy with the redundancy arrangements being put in place. It is not satisfactory, but the good thing is that we are working with the workforce to protect it as best we can and we are also guaranteeing fuel supplies into Western Australia for industries and consumers across the state.